Corporate financial officers prefer to use book values when measuring debt ratios because:
A) book values are more stable than market values.
B) debt covenant restrictions are usually expressed in book value terms.
C) rating agencies measure debt ratios in book values terms.
D) All of these.
E) None of these.

Question

Quizplus · Accepted Answer

Corporate financial officers prefer book values for debt ratios because they are more stable, align with debt covenant restrictions, and are used by rating agencies.

Corporate Financial Officers Prefer to Use Book Values When Measuring